Preparing Myanmar’s next generation
Go big or go home. Over the years, successful businessmen have been preaching this golden rule to young entrepreneurs who dream of making it big. Project Hub Yangon has newly launched Myanmar’s first co-working space and incubation program to cultivate six budding entrepreneurs and start-ups to make their dreams a reality.
The 1,000-square-foot place is spruced up with a smattering of art deco with a touch of an oriental vibe, a stark contrast to the musty interior of the rest of the building. The room is divided into a few areas; one that can be partitioned into a meeting room for semi privacy with a drop of the curtains, a work-friendly space with tables, whiteboards and audio visual equipment, and a cozy space surrounded by beanbag chairs with an unlimited supply of coffee served on a traditional-looking food cart.
One of the co-founders of Project Hub Yangon (PHY), Peter Silvester, explains to Mizzima Business Weekly about how important it is to create a supportive environment for entrepreneurs to develop their businesses.
“At the moment in Myanmar, there aren’t a lot of people starting new businesses. There are a lot of established people starting businesses, there are a lot of people that would like to start new businesses but there are a lot of impediments or obstacles in their environment.”
From getting funds to the technological know-how of setting up websites or registering with the government, these are few of the many obstacles that entrepreneurs have to overcome in getting a head start.
After a year of entrepreneurial research for a year, Silvester has identified the top three needs for entrepreneurs to start their business: A good Internet connection, affordable space and a community of likeminded people.
The hub aims to address these needs by starting with an affordable co-working space, and offers memberships for those who are weary of their usual Internet café hideouts downtown, and can pay on a weekly or monthly basis instead of having to pay a year up front required for renting any space in Yangon.
Through the co-working space, the hub is also running an incubation program - Project Hub Fellowship, with the support of Ringier AG, a Swiss digital media company. Six successful Myanmar applicants, including two duo teams, and four entrepreneurs, will undergo a five-month program guided by mentors, including workshops, networking events and an investor pitch night.
“We’re not doing training, or education, but it’s sort of an informal gathering place where we can do talks by developers, and networking events. That’s a part of the benefit of the co-working space, which you’ll see all around the world,” he says.
While PHY is not under the same brand as The HUB Company, a global network of more than 30 independent local hubs worldwide, such as well-established ones in Silicon Valley, Singapore and London, it works in the similar spirit and mindset in providing opportunities for starting entrepreneurs. Silvester has talked extensively with the team, but has no plans for the global hub network to start in Myanmar yet.
“We would like to see the hub network, we’d like to see them adapt their value proposition to better suit the developing country context because Yangon is not Zurich, it’s not Amsterdam, it’s not New York in many ways,” he says.
But like most start ups anywhere, money is often the most pressing issue. Erik Oo, 25, and Stephen Kyaw, 26, form a public relations agency called T3PR and is also one of the teams selected for the fellowship. They are trying to revolutionize the public relations sector by creating mobile apps to establish a connecting platform for their clients and the general public.
“Without money, we will always be stuck at the idea phase and won’t be able to develop it into a real business. Right now, we’re under negotiation with investors and offering them corporate video and advertising packages in exchange for investment,” Stephen Kyaw says.
Just for the idea development phase, they estimate a need for US$30,000, which will cover hosting events, outsourcing and advertising. One of the obstacles they say is to ensure investors they are trustworthy and worthwhile of investment. Now armed with a novel concept and the support of Ringier and the fellowship program, they hope their improved reputation will be enough to convince investors to chip in.
And that’s only the tip of the iceberg, both Erik Oo and Stephen Kyaw are currently juggling full time jobs, because let’s face it, someone’s going to have to pay for lunch. But starting a business is no part-time job, or hobby for the weekends. Now with the fellowship program on the go, they’re willing to quit their jobs to fully dedicate themselves to the business.
Another fellow member in the program is Htet Wai Phyo, a recent university graduate who is looking to create the first local Myanmar search engine, Bindez. Together with another friend, he came up with the idea and hopes to turn it into a business.
“We want to create something sustainable, and share our vision with other people. I want to work with other people doing what I love, not just for fun,” he says. Even after two years of hard work, he says almost everyone still tells him it’s too big of a game to play.
“They keep asking me why I don’t go to other countries like Singapore and Australia where you can make a lot of money working in the IT industry. But I think we have something to contribute here,” he says.
With the country having just opened up, Stephen Kyaw says that many of the young generation still fear the risk of starting their own business as they feel they remain under the shadow of the government and the army.
“Many people think to start a business you need to know high ranking officials in the government or have a network in the army,” he says. As of today, the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) is one such body that aims to act as a bridge between the state and businesses in the private sector. Currently it boasts of more than 20,000 members and offers a wide range of services such as training to local companies.
Knowing and talking to the right people could be a make or break moment, but Wai Phyo, managing director of Cho Cho Co. Ltd, Myanmar’s instant noodle manufacturing giant, says it’s not the most important thing.
“Entrepreneurship is about finding a different way of doing things. You can start your own business and try in a more customer and consumer centric way rather than a godfather centric model where you need this guy’s blessing or help to open doors for you. That may have been true in the past, but nowadays it’s much more open. I don’t think these young guys should be so afraid to take that step because they don’t have a general or minister that they know,” he says. Wai Phyo, also the president for Myanmar Young Entrepreneurs Association, however cautions the fledgling entrepreneurs about potential foreign competition, which should be one of their biggest concerns.
“These foreign companies are going to come in soon, and young entrepreneurs have to look out for them because they are going to live, eat and breathe innovation,” he says.
Htet Wai Phyo has high hopes for his Myanmar search engine that one day it will be good enough to rival Google, like how Chinese users are loyal to Baidu – China’s number one search engine, but the development phase still has a long way to go. He fears he won’t be able to compete when foreign companies surge into the market with their plethora of resources and vast capital.
One thing foreign companies do not have is the home court advantage. They may be bigger, but Wai Phyo says local Myanmar entrepreneurs and companies have an edge that will put them a few steps ahead.
“How well you understand the market will reflect how well you do. They are multinational companies, but they’re not homegrown, they’ll need to take the time to learn,” he says.
He adds that although foreign competition is a force to be reckoned with, it could prove to be beneficial in the long term.
“If you look at any country, foreign companies have shown to have long-term positive effects. Everyone complains about them eating up the market share but in the long term, they’re a weeding out process. The strong become stronger, the benchmark becomes higher and the local guys become better,” he says.
The influx of foreign companies will prove to be a testing fight or flight period for Myanmar. Those who fight could possibly become the next national pioneers in the country.
There is a reason why Myanmar is branded as the Golden Land, rich with natural resources but also teeming with opportunities. To Wai Phyo, now is the best time for entrepreneurs to take the gamble.
“It’s a great time to be in Myanmar. In the past, we had monopolies and state-owned enterprises. Now they are torn down and privatized. Entrepreneurs need this freedom to express and try out their own ideas,” he says. With Myanmar remaining as one of the few countries in the world that is largely untouched by Western brands, the market is open and up for grabs. Co-founder of PHY, Silvester strongly believes that the foreign-run fellowship program has much to offer to
“The great thing about encouraging Burmese companies to start up to solve problems is that they do it sustainably, they’re not donor dependent. They’re not employing a large amount of foreigners, they’re Burmese people coming up with Burmese originated solutions, innovations to solve Burmese problems,” he says.
He adds that when these entrepreneurs are able to run successful businesses, it could prove to be a “hugely catalytic force”, opening up employment opportunities and providing a nurturing environment for Myanmar companies to grow and flourish.
The road ahead for young entrepreneurs often starts with a downhill track. The risks and sacrifices they have to first undergo in the beginning will be the test to see if they can withstand and endure the next uphill climb to the peak.
This article first appeared in the August 29 edition of M-ZINE+.